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Highlights -- 76th meeting of the CDM Executive Board

Highlights -- 76th meeting of the CDM Executive Board

Board agrees on plan to improve CDM and
seek out potential demand

For a full report of the meeting see <http://cdm.unfccc.int/EB/index.html>.

Warsaw, 8 November 2013 –- The CDM Executive Board has agreed on a management plan designed to further improve the clean development mechanism (CDM) and find additional demand for certified emission reductions (CERs).

The plan is designed to deliver on a two-year business plan agreed by the Board in October that aims to increase the efficiency and effectiveness of the CDM validation and verification standards and procedures, and facilitate the acceptance of CERs for compliance and voluntary purposes.

“Our approach is to plan and spend prudently to improve the CDM, so that when demand picks up, the countries will have an even better tool at their disposal,” said CDM Executive Board Chair Peer Stiansen. “In the meantime, we’re going to look for new sources of demand for CERs, both for compliance and voluntary use.”

The emission reductions produced by CDM projects can be used to help countries comply with their commitments under the Kyoto Protocol. They are also used in regional and national cap and trade schemes. As well, from the outset, CERs have been used by some companies as part of corporate social responsibility programmes, offered by some airlines to their customers to offset travel and by event organizers. Yet another source of demand is from agencies wishing to use the validation and verification strengths of the CDM to deliver so-called results-based financing for activities that mitigate greenhouse gas emissions. The Board will work to increase demand from all of these sources.

“When it comes to CERs for compliance, we need to let the new and emerging cap and trade systems know, loud and clear, that they have a proven tool ready to use,” said Mr. Stiansen. “When it comes to the voluntary sector and results-based financing, I see us raising awareness about the benefits of the CDM and making it easier to source CERs and project opportunities.”

In 2012, rule changes were agreed allowing project participants to cancel CERs in the CDM registry on behalf of third parties. The Board will recommend to Parties to the Kyoto Protocol, when they meet in Warsaw in the coming two weeks, that they allow for other changes to the rules, specifically to allow transfers of CERs from the registries of developed country governments into the CDM registry.

The Board will also recommend that the CMP:

• Encourage Parties to make more use of the CDM in their emissions trading markets
• Encourage voluntary CER cancellation by countries, companies, agencies and other entities, and
• Invite the Green Climate Fund, the Global Environment Facility and other entities to use the CDM for results-based financing.

The CDM has been a success, with more than 7,300 emissions-reducing projects registered in 93 countries. However, the mechanism now faces challenges due to low demand for CERs, due ultimately to countries’ level of ambition to reduce greenhouse gas emissions.

Last year, Parties to the Kyoto Protocol agreed a second commitment period under the treaty, but with fewer countries involved than in the initial period. However, countries also agreed to negotiate a comprehensive agreement, including all countries, to be agreed by 2015 and implemented by 2020.

The CDM Executive Board will hold a question and answer session with stakeholders, including the press, on Tuesday, 12 November, 13.15–14.45 h, in Press Conference Room 2, Level -2, at the main COP19 venue in Warsaw.